Vol. 80 December 15, 2012 Pet Health Insurance

December 15, 2012

hubThis subject springs to my mind this month
because my friend got a free kitten for Christmas last year.
Her daughter had rescued him from a dumpster.
His name is Charlie.
More on Charlie later.

According to industry statistics $13 Billion (yes, that is a “B”) was spent in 2010 on veterinarian care for pets in 73 million households; a 40% increase over 2006. In 2006 there were about 86 million cats in the U.S. If they could vote, and did so as a bloc, they would bury the 78 million dogs. With the number of pets and costs rising like that, I wondered what the pet health insurance market was like. Does the pet health insurance marketplace have lessons, or even “best practices”, for us in our struggle with health insurance costs and coverage for humans? Is it time for an Affordable Care Act for pets? I decided to take a look.

As I surfed through pet health insurance plans I was struck by the similarities to our (human) health insurance plans of the 70’s and 80’s. The subscriber pays the vet and gets reimbursed 90% of “usual and customary” fees. The companies promise “quick-turn around” of claims, of course. The vet has no forms to fill out or sign. The subscriber does it all. These familiar phrases sound like “the good old days” to physicians who now have two or more full-time office people filling out all sorts of insurance billing forms and/or an IT consultant to do it electronically.

You can go to any licensed vet. There is no concern about “eligible providers” or being “out of network”, but policies do differ from state to state. Reimbursement is not dependent on diagnosis (no need for bulky code books or sophisticated computer programs). None of the policies cover pre-existing conditions or preventative care services (routine visits to the vet). Those are optional coverages available for additional premium.

It all sounds pretty simple and straight forward until you start reading more closely. An asterisk here and a double asterisk there sends you to fine-print footnotes defining “eligibility criteria”, “waiting periods”, “continuing care”, “pre-existing conditions”, and “congenital conditions”. That’s not only identical to our “good old days”, but it also holds true today.

A neighbor just spent $400 on the annual visit and necessary vaccines for his three Labradors. When I asked him if he had health insurance for them, he replied, “No way was I going to spend all that time figuring out what they covered, and when, and for how much. It was too complicated. I struggle enough trying to understand the policies I buy for my employees.”

Pet health insurance was started in Sweden in 1924  and was adopted  in the U.K. around 1947. The first pet insurance policy in the U.S. was written in 1982 for the protection of our TV hero Lassie.  (Do Socialist countries always lead the way in developing health insurance plans?)  NAPHIA, North American Pet Health Insurance Association, was founded in 2007. In Canada there are 10 cat health insurance plans while in the U.S. you have the choice of 36 plans for cats. (Capitalism is so-o-o predictable sometimes)

Back to Charlie….Remember Charlie?….This is a blog about Charlie.
He is an extremely cute, solid black kitten that made my friend’s last year’s Christmas stocking begin to wiggle. When his head popped out with those big, wide open green eyes, the mystery of the stocking was over, and the love affair began. Health insurance for him was available after a mandatory 30-day waiting period (the insurance company wanted to be sure he survived that long I guess).  The waiting period for coverage of “congenital conditions” is 180 days, presumably for the same reason. It would cost from $4.08 per month to $67.14 per month depending on coverage options, BUT excluded preventative care and routine visits to the vet.  After reading Consumer Reports my friend decided not to buy any.

The first visit to the vet cost $103.75. That included $26.00 for a FVRCP shot against Feline Viral Rhinotracheitis, aka “a bad cold”, and $21.75 for a fecal specimen exam. The second visit a month later was $161, and the third month it was $277. That one was higher because of the anesthesia charge for the neutering ($36.00) and a Catalyst Chem 10 test ($62.00). The lab business for pet tests seems as lucrative as for our tests. The neutering operation itself seemed like a bargain at $50.50.  It was only slightly higher than the placement of the ID microchip under his skin. (ER docs and police eat your hearts out!  The technology is here.)

Rather than continue to bore you with the details, suffice it to say, my friend’s “free” kitten cost over $500 for vet visits in the first year alone. I am not even going to try to total up all the other costs because someone else already has.  According to a 2010-2011  survey the average annual maintenance cost of a cat in the U.S. is $1217.

Maybe a “free kitten” should have been included in my list of Christmas presents to give your enemies rather than your friends.  But as the commercial says:

” Vet visits -$500…
Food for a year – $400…
Toys -$21…
Having Charlie’s warm meows greet you when you return home or when you awake in the morning – Priceless!”

Vol. 60 February 1, 2012 “I Coulda Been a Vet!”

February 2, 2012

We got a free kitten for Christmas. His fuzzy black head with saucer green eyes popped right out of the top of the Christmas stocking, just after we registered surprise that the stocking was undulating. Within 24 hours that less-than-two-pound pile of free fur had cost us $150, thanks to “miscellaneous purchases” at PetCo. The first visit to the Vet cost $103.75; the second $161.25.

My mother thought I would be a good vet because of my comforting ways with animals. I thought being a physician was perhaps a nobler calling, and besides, Vet Schools were harder to get into than Med Schools in 1962. At the end of my medical school time I had ruled out obstetrics because they did half of their work at night, surgery because I couldn’t live without lunch, and psychiatry because I didn’t think it was medicine. That left internal medicine and pediatrics as the sole remaining specialties. I couldn’t decide, and so signed up for a joint internal medicine-pediatric internship, 6 months for each specialty.

I did my internal medicine rotation from July 1 to December 31. On January 1 I started my pediatric rotation in the ER. On January 3 I had the most painful ear infection I had ever had in my life. Despite this omen, but buoyed by the success of that magic bullet, amoxicillin, I signed up for a pediatric residency. Dr. Sydney Gellis, past Chief of Pediatrics at Tufts and a sympathizer with practicing pediatricians unlike the other normally aloof academicians of the day, used to extol us at national meetings to “at least charge as much for your shots as the vets do.”

Charlie, that’s the kittens name, got his Feline Viral Rhinotracheitis (FVRCP) shot at 2 months for $26. “Rhinotracheitis” is a fancy word for runny nose and windpipe inflammation, in other words, a cold. A rabies vaccination was $26 and the Feline Leukemia Vaccine and “snap” (FELV/FIV/+) was $61.25. In our pediatric office we charge $46 for vaccine administration. I really have no idea of what we actually get paid. Each insurer pays a different amount. We were offered Cat Health Insurance for $17 a month for life (the cat’s life; ALL of them presumably) with a $500 annual deductible, but we turned it down.

We pediatricians do circumcise infants, but we don’t neuter. We do guaiac tests for occult blood in stools ($36 charge) while the vet did a “Fecal Exam (flotation)” for parasites (I presume) for $21.75. The vet also charged $4 for “medical waste disposal” and $5 for “medical record set-up” which is something we pediatricians should think about, for the dirty diapers alone.

I wonder what the dues are for the American Veterinary Medical Association (AVMA)? They have 20 specialties listed under their banner, including Veterinary Radiology and Veterinary Dermatology, two lucrative specialties under my AMA banner. Of course, the dues for the American Association of Feline Practitioners (AAFP) would be extra. Like the American Academy of Pediatrics (AAP) and the AMA they both publish guidelines (“Feline Life Stage Guidelines”) , conduct multi-day, professional education conferences in resort towns, publish warnings about feline risks of obesity , and even sell a 118 page “Disaster Response Handbook”.

So, being a pediatrician may not be all that different from being a vet. While planning a new building for our group pediatric practice, I was reminded of how close it was when the architects remarked, “Except for the lack of stainless steel exam tables, this project is just like our last one, an animal hospital.” After all, half of my patients can’t talk, and I spend a lot of time dealing with their worried, anxious owners….excuse me,… parents.

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